Olayemi Cardoso’s three-year tenure as Governor of the Central Bank of Nigeria (CBN) has marked a transformative period in the nation’s monetary and financial systems. Since assuming office on September 22, 2023, Cardoso has spearheaded a comprehensive restructuring of Nigeria’s financial architecture, addressing longstanding challenges such as foreign exchange market distortions, weak monetary policy transmission, and banking sector vulnerabilities. The reforms, which have drawn praise from President Bola Ahmed Tinubu and international institutions like Central Banking, London, which awarded the CBN the Central Bank of the Year title, aim to create a more resilient and efficient financial ecosystem.
The CBN’s efforts have focused on multiple fronts, including banking sector recapitalization, foreign exchange market liberalization, payments system modernization, and enhanced financial crime controls. These initiatives have not only stabilized the monetary framework but also laid the groundwork for long-term economic growth. However, the true test of these reforms lies in their ability to translate institutional changes into tangible economic outcomes, such as lower inflation, affordable credit, and sustained investment.
Rebuilding the Foundations of the Banking System One of the most significant components of Cardoso’s reforms has been the strengthening of Nigeria’s banking sector. The CBN’s banking recapitalization program, which concluded on March 31, 2026, saw 33 banks meet revised minimum capital requirements, raising approximately N4.65 trillion in fresh capital. Of this, 72.55% was sourced domestically, bolstering the sector’s resilience and capacity to absorb shocks. The initiative was not merely about increasing capital but also about enhancing governance and ensuring banks could support a more productive economy. The CBN also introduced a succession framework for Domestic Systemically Important Banks in September 2025, aiming to ensure orderly leadership transitions and financial stability.
In addition, the Bank of Industry’s Non-Interest Banking Window was approved in February 2026, expanding financing options within the system. These measures reflect a broader strategy to build a banking sector that is better capitalized, governed, and equipped to drive economic diversification. The reforms have been lauded by industry experts, with Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, noting that the recapitalization has significantly improved the sector’s stability and capacity to support economic activity.
Re-engineering the Foreign Exchange Market The restructuring of Nigeria’s foreign exchange (FX) market has been another cornerstone of Cardoso’s agenda. Historically plagued by multiple windows, pricing distortions, and arbitrage opportunities, the FX market underwent a major transformation under his leadership. The CBN moved toward liberalizing and unifying the market to enhance transparency, price discovery, and efficiency. Yusuf highlighted that the elimination of multiple FX windows reduced corruption and improved market confidence, while the launch of the fourth edition of the Foreign Exchange Manual in May 2026 further strengthened transparency and market-driven operations.
The CBN also introduced structured access to FX for Bureau de Change operators through authorized dealer banks, supported by an FX BDC Purchase Tracker to improve oversight. In March 2026, international oil companies were permitted to repatriate 100% of export proceeds through authorized banks, further liberalizing the FX framework. Additionally, new naira-settlement requirements for International Money Transfer Operators were implemented to enhance remittance traceability. These measures have contributed to a significant increase in Nigeria’s external reserves, which surpassed $50 billion in 2026, reaching $54.78 billion as of September 21, 2026. The inclusion of locally sourced gold refined to international standards also diversified the country’s reserve assets, strengthening its external buffers.
Building a Modern Payments System The CBN’s focus on modernizing Nigeria’s payments infrastructure has been another key priority. The Payments System Vision 2028, launched on June 1, 2026, aims to create a digital, secure, and globally integrated payments ecosystem. The initiative, which includes interoperability, security, and innovation, was preceded by the inauguration of the project committee in September 2025. Revised Agent Banking Guidelines introduced in October 2025 strengthened consumer protection and transaction controls, while PoS geo-fencing and dual-connectivity measures in 2026 improved the resilience of electronic transactions.
The CBN also enhanced instant-payment security by giving customers greater control over transaction limits and introducing real-time fraud monitoring. These reforms reflect a shift in the CBN’s role from regulating banks to overseeing the infrastructure through which Nigerians interact with the financial system. The emphasis on cybersecurity and fraud prevention has been a defining feature of the Cardoso era, with the introduction of a Cybersecurity Self-Assessment Tool and automated AML/CFT/CPF standards to strengthen institutional resilience.
Addressing Financial Crime and Consumer Protection Cardoso’s reforms have also prioritized consumer protection and the fight against financial crime. The CBN revised its cash policy in December 2025, introducing withdrawal thresholds and removing deposit charges to encourage digital payments. In November 2025, financial institutions were directed to withdraw misleading advertisements and improve transparency. The BVN and watchlist framework was strengthened in March 2026 to combat fraud, while new automated AML/CFT/CPF standards were introduced to enhance real-time monitoring of financial risks.
These measures underscore a broader shift in the CBN’s approach to financial stability, which now encompasses cybersecurity, identity verification, and fraud prevention. The reforms aim to build a financial system that is not only resilient but also secure, ensuring that Nigerians can transact with confidence. However, experts like Tilewa Adebajo, CEO of CFG Advisory, argue that the next phase of reforms must address inflation targeting and policy coordination to fully realize the benefits of these institutional changes.
Modernizing Monetary Policy Transmission Another critical aspect of Cardoso’s agenda has been improving the transmission of monetary policy through financial markets. The introduction of the Nigerian Overnight Financing Rate (NOFR) in April 2026 created a new benchmark for overnight transactions, enhancing price discovery and market transparency. The CBN also strengthened its oversight of fixed-income market trading and settlement infrastructure, while reviewing access to the discount window and liquidity markets.
These reforms are essential for ensuring that monetary policy decisions translate effectively into economic outcomes. A policy rate change, for instance, must be transmitted swiftly through money markets, banks, and the broader economy. The CBN’s focus on improving this mechanism reflects its commitment to creating a more responsive and efficient monetary framework.
Challenges and the Road Ahead While the Cardoso reforms have achieved significant progress, challenges remain. Tilewa Adebajo highlighted the absence of inflation targeting as a critical gap, noting that the rebasing of economic data has distorted inflation measurements. He emphasized the need for coordinated monetary, fiscal, and industrial policies to consolidate the gains of the reforms. Adebajo also pointed to a historical period of stronger economic performance, when inflation was around 9.5%, interest rates were 11.5%, and growth averaged 8-10%, as a benchmark for future success.
The next phase of Nigeria’s economic management will depend on translating institutional reforms into tangible outcomes. A stronger banking system must translate into increased lending to productive sectors, a transparent FX market must support investment, and higher reserves must provide resilience against external shocks. The CBN’s reforms have laid the foundation, but their long-term success will hinge on sustained implementation and policy coherence.
The broader implications of these reforms extend beyond the financial sector. A stable monetary architecture is crucial for attracting investment, reducing financing costs, and fostering economic growth. As Nigeria navigates the complexities of a rapidly evolving global economy, the CBN’s efforts under Cardoso will be pivotal in shaping the nation’s financial future.
The CBN’s three-year transformation has redefined the parameters of monetary governance in Nigeria. By addressing systemic vulnerabilities and modernizing financial infrastructure, Cardoso has set a new standard for central banking. However, the true measure of success will be the ability of these reforms to deliver sustained economic benefits, ensuring that Nigerians experience the tangible rewards of a more stable and resilient financial system.
The journey is far from over, but the foundation laid by Cardoso’s reforms provides a roadmap for Nigeria’s financial sector to achieve greater stability, efficiency, and inclusivity. As the CBN continues to refine its approach, the focus will remain on translating institutional changes into lasting economic outcomes that benefit all Nigerians.
The CBN’s achievements under Cardoso underscore the importance of proactive, comprehensive reforms in addressing complex economic challenges. By prioritizing resilience, transparency, and innovation, the central bank has positioned Nigeria for a more stable and prosperous financial future. The next chapter of this reform agenda will determine whether these efforts can be sustained and expanded to meet the evolving needs of the Nigerian economy.
The legacy of Cardoso’s tenure will be measured not only by the reforms implemented but also by their impact on the lives of Nigerians. A stronger financial system, capable of supporting investment and growth, is essential for the nation’s long-term development. As the CBN moves forward, the focus will remain on ensuring that these reforms deliver the economic stability and opportunities that Nigerians deserve.
The CBN’s three-year overhaul has redefined the parameters of monetary governance in Nigeria. By addressing systemic vulnerabilities and modernizing financial infrastructure, Cardoso has set a new standard for central banking. However, the true measure of success will be the ability of these reforms to deliver sustained economic benefits, ensuring that Nigerians experience the tangible rewards of a more stable and resilient financial system.